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The Economic and Industrial Impacts of Air Pollution: Focusing on Particulate Matters

Author Lee, Jaeyoon et al. Date 2018.12.14 Page

This study analyzes the economic and industrial impacts of air pollution focusing on particulate matters(PM). There have been several studies that examine the impacts of PM on economic outcomes such as labor productivity and production, but few studies have discussed the impacts in the context of industry. Moreover, the industrial impacts should be addressed for individual industry as each industry has different production process and emission characteristics. However, no studies have conducted such analyses.  


This study provides, for the first time, qualitative and quantitative analyses on the industrial impacts of PM. First, it investigates the emission process, mitigation technologies, and reduction potentials of PM-intensive industries. In addition, a survey was conducted to examine the current status of related industries regarding their awareness on the impacts of PM, countermeasures against the relevant regulation, and the challenges and limitations in compliance with the regulation. The results indicate that the industries are aware of the seriousness of PM emissions and see the necessity of policy interruptions. However, there exist differences in opinion regarding the stringency and the process of such policies. 


This study provides an empirical analysis that quantifies the eco- nomic and industrial effects of the PM emission regulation using a computable general equilibrium model. In addition to the PM emission regulation, the model includes the greenhouse gases(GHG) emission regulation under the assumption that both regulations are dependent. The results confirm that both regulations affect each other as one regulation reduces the other emission. The estimated effects of PM and GHG emission regulations vary over industries; the production reductions in metal industry and petrochemical industry are relatively large. 


The findings and results of this study provide some policy implications. First, a set of reliable data for PM, especially the data by the source of emission, needs to be constructed for a better analysis. The latest data available is now for 2014, and it should be updated more quickly. Second, the source of PM should be continuously investigated. The major source of domestic PM emissions are still arguable, whether it is the emission from industrial sector or from overseas. This needs to be identified before any policy interruption. Third, PM reduction policies should be feasibly designed after considering factors that affect the mitigation cost, such as the level of technology and mitigation potentials. Otherwise, the policies would have absolutely no effect, and would only be an undue burden upon industry. Lastly, when introducing a new regulation regarding PM emission, policy makers should consider the redundancy of policies carefully. The result of empirical analysis shows that PM emission regulation is not in- dependent from an existing regulation-GHG emission regulation, which implies the possible improvement of policy efficiency.